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tv   Squawk Alley  CNBC  November 10, 2014 11:00am-12:01pm EST

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it's almost 11:00 a.m. on wall street. "squawk alley" is live. ♪ ♪ welcome to "squawk alley." just past midnight in china which means singles day has kicked off. it is the biggest on-line shopping day in the world. 24 hours of deals and p pro motions. our own david faber is in china where he will interview alibaba's founder and executive chairman jack ma tomorrow at 10:00 a.m. eastern time. good morning once again. >> well, carl, we've just
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started, of course, the biggest on-line shopping day, of course, as you just said in the world. in fact, the board behind me, which i think everyone can see, is reflecting and updating in real time how many dollars worth of merchandise is being sold. last year it was 5.8 billion dollars worth. this year could exceed $8 billion as they take in the so-called singles holiday which was really nothing more than a day to celebrate being single a number of years ago and made it into the biggest shopping day it if you will of the year in china and trying to globalize that in terms of on-line shopping. let's see how successful they are in meeting or exceeding those goals. we're talking about also logistics exercise of enormous proporti proportions. 158 million packages moved or changed hands last year as a result of all that buying that went on. this year, they're expecting a lot more than that. of course, alibaba does not own
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its logistics. it does own 48% of china logistics. doesn't own distribution centers or those that deliver the packages. they rely on 14 separate distribution companies throughout the country to do that. we'll see how it goes here. of course a lot of big expectations, especially given the huge run up in the stock 70 plus percent since it went public at $68 not many weeks ago, now supporting a value now in excess of walmart. there is a great deal of excitement as the number keeps ratcheting up towards what may be the first billion at least. there you have the dollars sign, $100 million sold in about two minutes or so, guys. we're watching it closely as you said, talking with jack ma, executive chairman and founder of alibaba tomorrow at 10:00 a.m. get his reaction in the last hour, that has now begun here with the first hour of singles day. >> that is an amazing setup they've got there, david. i think we got to get that back home for some u.s. retailers on
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black fridayp. that's an amazing -- like a telethon clock. david faber joining us. john steinberg is on set, ceo of daily mail north america, cnbc contributor, jon fortt, kayla tausche. that does give you a sense of the money that is going to pile in over the next 24 hours? >> everyone thinks they're going to hit that $8.5 billion in gross merchandise value. that would be 45% year over year growth compared to what they did on singles day last year. and what's interesting to me, i wonder if you can look at that clock and time adjust and say if they've hit $100 million in the first two minutes where are they tracking to hit $8.5 billion. it's a lofty goal and investors have priced in a massive singles day. >> it's not popular to be the bear on this stock or the bear on singles day, but the important thing to remember now that alibaba is a public company is that much of the activity, the buying activity, on singles day is spurred by deep discounting. a lot of consumers wait for singles day to make their purchases because they've been promised discounts in the range of 50% depending on what you're
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buying. if you look at jd.com one of alibaba's competitors, albeit a smaller competitor, that stock has been up as much as 7.5% today because they're going to get some of the offshoot business because they're discounting at an even deeper rate. even though the activity is going to be huge, it's going to be record by all estimations, remember how much this could affect margins and how much at the end of the day alibaba will actually take home from this despite all of the frenzy. >> agreed. only 50% margins in this case, right? >> yeah. this is a marketing event more than anything i believe. it's the emergence of a new christmas. our christmas over here has been commercialized for a long time. china is getting its version of consumerization there, but what i think is interesting, is the international potential of singles day. the u.s. is struggling with the fact that we train consumers not to pay attention to the holiday season until thanksgiving week. in europe it's not so much that. the holiday season stretches from the beginning of november, it's a lot more even, a lot more
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even revenue, something like this is an opportunity for u.s. e-commerce as well if they can capitalize on something like this. it gets people buying earlier in the month. >> i completely agree. reading the report from sun trust where he talks about the international opportunity for singles day, i think singles day will go international. why not? who wouldn't want to celebrate the fact that they can't celebrate valentine's day if they don't have a valentine. but alibaba will not get that. amazon will get that. best buy will get that. you know be all those different domestic retail players will find a way to get it before alibaba gets it. >> you think alibaba will bring it here and give it away? >> i don't think they'll bring it here. once every retailer in the u.s., once amazon sees this or amazon has seen this, they'll say it's broken enough main stream why wouldn't we do singles day on amazon, singles day, you know, on all the different e-commerce platforms in the u.s., itunes, why not have singles day. >> the sun trust report says this could be a global phenomenon five to ten years. one thing for sure in the meantime u.s. retailers will try
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to tap into the china consumer even if the global consumer doesn't get folded into the trend of singles day. at least they will build a platform in the next two to three years to tap into the buying power that is only going to grow. >> i expect jack ma to invent a new character like santa claus, rudolph, we need new characters. >> and create a tv show on it, men buy a minority stake in that tv show and keep going. >> sports team. >> $116, stock is up 75, 76%. from the ipo. lofty levels. no doubt about that, although cramer still sees 120, basically we're basically there. meantime the white house out with a pretty big announcement this morning. the president asking the fcc to set the strongest possible rules to protect net neutrality as the agency writes new internet traffic regulations. the white house also put out a video to accompany the release. here's the president in his own words. >> in plain english i'm asking them to recognize that for most
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americans, the internet has become an essential part of everyday communication and everyday life. the fcc is an independent agency and ultimately this decision is theirs alone, but the public has already commented nearly 4 million times asking the fcc to make sure consumers, not the cable company, gets to decide which sites they use. >> interesting. got reaction from the national communications and telecom administration. we are stunned the president would abandon the long-standing, bipartisan policy of lightly regulating the internet and calling for extreme title 2 regulation. this is heating up in a hurry. >> yeah. you know, here's what i think about this overall argument. there's a lot of attention paid to net neutrality, consumers care about access, i think that's important, consumers care about speed. i'm not convinced that neutrality gets you there at all. what we need is broadband competition. if you don't like what your isp
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is doing as far as throttling you or not giving you the speed or pricing wouldn't it be nice to have another option to say i'm switching. >> so that's a consolidation argument against. >> a competition agreement. i agree. net neutrality sounds good in princip principle. i don't want to pay more, want more bandwidth. these companies need to expand their wireless broadband. how can you do that if the government will regulate how much you can make off this. net neutrality sounds good in principle but if you dig into what the results will be it's not so great. >> this is not just a retroactive airing of concerns. there are two deals currently live, currently sitting at the fcc right now and i'll tell you hedge funds are getting increasingly nervous about the fate of both of these deals. there was, in fact, an article in "the new york times" over the weekend talking about the spread which is a jargon term for the difference between what a company agreed to pay to take over another company, and where that company's stock is trading right now and the difference between that for time warner
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cable shares is about 12%. it was as high as 13% this morning and normally you see that in the 1 to 2% range for deals that are expected to sail through. there have been a lot of hedge funds selling because over the last three months there have been stronger words out of washington, in favor of more competition, and there's an idea, that -- >> i think it's a very reactive. i think the government says consumers want competition so we're going to block mergers but they don't realize how much economies of scale there are in the cable space and these people being able to invest in their plan, invest in their servers. look at what google and amazon have been able to do with massive scale and centralization. >> and, of course, we should mention comcast owns cnbc and the rest of nbc universal. i'm not convinced that this position is actually detrimental to comcast's desire to buy time warner cable at all. i mean if the government comes out and says, hey we're all for net neutrality, we're all for consumer strong rules, and let this merger go through it makes sense. i'm not sure that helps consumers all that much because
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competition is really the thing that helps consumers. >> it will make the product less good. even if this is a carrot to get the merger to go through, why would you invest in your plant if you are going to be regulated why bring more speed? what's the point? >> you're back at alibaba's headquarters covering that story but listening to this conversation. your thoughts on the president's comments today? >> you know, carl, i've been so busy watching the board behind me, and trying to get some reference points for people to understand exactly how much is being sold, that i haven't been listening as closely as perhaps i should have. what i will tell you, you can see, $618 million worth of merchandise having been sold right now within the first two minutes and 20 seconds there was a billion worth of rnb sold, little over $100 million worth. last year took over 6 minutes to sell that much on the alibaba platform. we're talking about t-mall,
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about 27,000 merchants are participating what are significant discounts, so much so that a lot of the on-line traffic to alibaba drives up if you will in the days preceding singles day, because people know that they can wait a few more days and get many of the things they're looking at. what's interesting you look at the board and see some of the more popular items. even the apple iphone shows up in the top let's call it five. they don't discount as we all know at apple. the idea is not just to bring people to the platform to get bargains, but also to bring them to the platform to simply create traffic that results in sales that might not have otherwise taken place even for nons discounted items. we spoke earlier -- i spoke earlier to one high-end handbag maker who sells as much as 20% of all their on-line sales in one day and many of them have been planning for this for months and logistically we also talked to some trucking companies who have -- or the delivery companies that have added hundreds of trucks all of this, of course, coming months and planning for this big day as you see, which continues to
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ratchet up at almost 700 million dollars worth of merchandise sold. in what, about 12 or 13 minutes or so, carl. back to you. >> david, of course a lot more from david as long as they can stay awake. it is midnight there and interviewing jack ma tomorrow at 10:00 a.m. eastern time. >> a mesmerizing board behind him. i would keep my eyes on that all day. we're watching the markets here hitting records early in the session. dow industrials, dow transports as well as the s&p 500 hitting records intraday. 90% of the s&p has reported earnings, a large driver today. markets we should remind you coming off the best three-week session since december of 2011. so quite a run for the markets taking a bit of a breather early on, hitting records, and now giving a little bit of that back. currently dow up 20 points, s&p up 5 points. nasdaq up 16 points just a little bit shy of two hours into trade. carl? >> when we come back, entrepreneur and philanthropist
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peter diamdanis with the latest of the x-prize challenge. both coming up next, ahead of that interview with alibaba's jack ma tomorrow, more on the biggest day in e-commerce. singles day has kicked off in china. one popular browser turns 10 years old. the woman at the head of firefox parent mozilla. we'll be right back. cocoa or eggnog?
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i'm mandy with a market flash. a tough day for teen retailers abercrombie & fitch, after oppenheimer crown graded the stock and lowered its target price to 30 bucks. the stock has lost 20% since the company announced its weak sales result and earnings outlook last friday. as we can see it's trading down 2.75%. american eagle also moving lower by nearly 4%. b reilly downgrading that stock saying it's a little under whelmed by its holiday content sitting at 12.44. back to you. >> thank you very much. x-prize is that ongoing competition that gives out millions of dollars a year to the most cutting edge start-ups making break throughs in technology. this year's winner is no different. joining us this morning in a cnbc exclusive dr. eugene chan the founder and ceo of the dna institute took the prize for the r health sdimg an ceo peter
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diamdanis. good morning to you both. >> good morning. >> good morning. >> peter, walk us through just the number of finalists, the decisions you had to make, and why dr. chan came out on top? >> sure. so we, of course, launch every year these x-prizes and rather than -- it's not really giving money out. we set some objective measures and we ask innovators around the world to actually solve a big problem and with nokia, with dr. henry, the cto there, we set out a challenge for reinventing biometric sensing capability. nokia put up $2.25 million of cash money. we did this in part one and part two and also m.i.t. harvard system, part one, and we have a second winner from harvard m.i.t., my alma mater as well, no coincidence, who -- dr.
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eugene chan who won it for his r health technology. it's really also a feeder to our qualcomm triquarter prize going on which dr. chan is a competitor for. it's about using innovation around the world to solve the most important problems. in this place making health care available to everybody at a super cheap capability. i will turn it over to him. >> dr. chan, let me ask you about r health. they're calling it or you call it a compact portable device that can run hundreds of clinical lab tests on a single drop of blood with gold standard accuracy. tell the user within minutes they have the cold, flu or more serious ailment such as pneumonia or ebola. how does it work. >> it works reasonably straightforward. device to the body like this. take a single drop of blood, collect a single drop of blood, you insert the sample into the reader, and we use these
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miniaturized test trips called nano strips to measure hundreds to potentially thousands of individual markers inside your blood and to be able to diagnose that within minutes. the main game plan is to give consumers their capability of being able to analyze as many markers as many laboratory tests as they can really in the comfort of their own home. >> dr. chan, tell me, project out three to five years, how is this going to change the way we live and what are the technologies that are accelerating this? is it the fact that we have portable computing smartphones in our pocket, wireless internet, a combination of things? >> really, we're at a remarkable point in time in terms of technology development. so many convergences and so many different fields and five years out from now we will have devices like the r health technology which are cheap enough so individual consumers can buy them and be able to answer hundreds of lab tests in a single drop of blood easily and be able to take care of
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themselves and their families really without a lot of intervention and a lot of hassle of making it to large hospital testing centers. >> we're really democratizing access to health and making it available, making the individual the ceo of their own health and empowering them to know what's going on and this amazing technology. >> doctor, when you look at the regulation, the 23 and me went through where they weren't allowed to disclose certain things the fda started regulating them, letters back and forth, what kind of regulatory impact do you think consumers will face, your company will face, when people want to start doing this home testing? >> so one of the great things that the x-prize foundation has done is to engage the fda early in the entire process. so as being a finalist in the qualcomm triquarter they brought the fda experts in at the same time as we're developing these wonderful technologies. and really, it's how do we actually get as many tests approved at the same time so
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that individuals don't have to wait for individual tests to get approved and so that you can get very large panels of the it test that you want as soon as possible. >> peter, eugene, thank you so much for your time. fascinating stuff and again, changing the face of health care as you mentioned with these advances in technology. just making its way into all kinds of space smoos what's going to be interesting to see is whether we have these things connected to smartphones and that's how they work, or if we have standalone devices that are coming out to read blood, the sort of technology could feed that that. lots of possibilities as we see companies like apple, google and others starting to focus in on health as a potential platform. >> all right. when we come back, gopro taking a hit this morning. a new offering of stock as the company raises some sun capital nick woodman selling some of his shares. gopro shares down 2.7%. "squawk alley" will be right back.
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gopro shares down as much as 5% after the company filed to sell hundreds of millions of dollars in stock. in an s.e.c. filing this morning, the company filed an s 1 registering the sale of 800 million worth of stock. nick woodman in an e-mail to employees the company plans to raise approximately $100 million of new capital and that this is, quote, intended to facilitate a more orderly and gradual sale of shares than what might otherwise occur when the ipo lockup ends december 2nd. they don't have a number of shares to be offered, kayla, or as price for that matter. 800 the magic number. >> and they still have all of the underwriters listed on the filing which lead mess to believe they're going to be going out in the market, marketing the shares so there's no price. looking at an average trading range over the course of several days, a window that will be predetermined by the bankers. so all of that information should come out in due course
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and then we'll expect a big block. of course this would, as woodman says, otherwise happen in december, when the lockup lifts and sometimes we do see a flood of investors rushing to the exit. it looks like they have basically had discussions with some of those investors to do this earlier on. >> this is like bringing the flood earlier. >> smoothing it out. >> it just says right now. here's the lockup, 700 million insiders will sell stock. the people don't think the stock is at a cheap price. only 100 million of new capital. frankly it's a little disappointing. you would like to see them raise more new capital and then they could go out and do acquisitions they need to do to be a media business. i understand a little bit of disappointment in the stock today. >> you would have gone the traditional route of just letting it happen? >> doesn't make a difference, right? >> doing a pure secondary. >> more a rip off the band-aid. you know how much is going to be sold but doesn't have any difference between that and a traditional lockup expir rags, i think. >> one thing to keep in mind for viewers who have been playing
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the frothy ipo market this year, many of those ipo companies are trading well above where they initially opened and we're in that sweet spot right now. there's about a four-week period between when a company announces earnings and when it's in its next earnings quiet period. those are the only times they can do secondary offerings. for some of these companies, where they've risen in a very sharp manner and they want to be able to use that stock as a currency at those levels, you will see a lot of activity here. if you're in a zoe's kitchen, i'm not saying i have intel they'll do that, you will look for activity like that for companies that went public earlier this year for that to possibly happen. all right. let's bring in simon hobbs, european markets are about to close and he's here to walk us through what is moving across the pond. >> you know, the italian introduction figure down 0.9% month on month, 2.9% year on year, in general market the market is rallying as you can see. one of the characteristics of the european markets has been as
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the price of oil has come down, so the oil stocks and the oil and gas services stocks have also tracked into negative territory. you see, though, just beginning to bounce here, they seem to have bottomed the price of oil has bottomed. interestingly enough today a number are substantially higher partly because one of the dutch operators so badly hit, namely fugro, has had a rival buy stake in them. they say they're not going to bid for the company but see the degree to which that is a top gainer on the session and other oil services are higher. on the downside today, the main loser is the company that's currently run by winston churchill's grandson nicolas somes coming to run circa which contracts for governments, prisons, trains, that type of thing, troubled company, today announced a massive charge and the rights issue. the stock down 32% as you can see. the top gainer is actually the dutch food, the nutrition giant, oftentimes for animals, nutrico.
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it's been taken private by a deal from a private company called shv. they over the weekend sweetened their offer to $3.7 billion as it became apparent that cargill has approached them potentially for a deal. i want to mention what happened in catalonia over the weekend. see 2 million spanish people wept to the polls there and the consultation of the sit zeps, 80% voting for independence, a flurry of research notes out today, jpmorgan saying it's not a game changer in their view. ubs saying the market should take this calmly. catalonia is different from scotland in september. although they do say with the tensions you have between the central government and the regional government it will be difficult to push through structural reform in cat lone ya and remember that is 20% of the spanish economy. guys, back to you. >> simon, thank you so much. you're going to vote to secede from the show. are you here for the hour or
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leave something what's the plan? >> i don't know. i thought i was here for the hour. i'm getting yanked. >> let's keep him for the hour. >> alibaba set for a record day of sales as singles day kicked off in china. we'll discuss the company's position, what it means for retailers. all that ahead of david faber's entire with jack ma tomorrow at 10:00. we want to hear from you. tweet us your questions for jack. with the #askjackma. your chance to have alibaba's founder answer your questions. dow up 26, s&p record at 2037. back in a minute. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price,
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president obama making a big statement today in favor of a free and open internet calling for net neutrality. julia boorstin joins us to explain what that means and what stocks are on the move. hey, julia. >> hi, carl. president obama urging the fcc to adopt the strictest rules possible to enforce net neutrality to treat broadband as a public utility like a telephone or power company. this would prevent broadband providers like comcast or verizon from charging internet companies like netflix or youtube for priority. he calls for prohibiting internet service providers from blocking legal content, slowing some content or speeding up others and calls for increased transparency in perhaps most important no paid prioritization. internet provides cannot require
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companies like netflix to pay a fee to have their sites and content moved faster. this is a direct contradiction to fcc commissioner tom wheeler's plan to allow broadband and content companies to strike deals. cable stocks including comcast, cnbc's parent company, moving down on the news though they have recovered a bit since this morning. the president's proposal if adopted would be a huge win for the range of internet companies that have been lobbying for net neutrality over the past several years from netflix and youtube to pandora and ebay, their shares moving up op the news. we are waiting for comments from the cable companies and netflix and youtube. we'll be back to you with more. kayla? >> thanks so much. we have a lot of executives weighing in. mark pincus of skingas saying the president's statement one of the reasons he still supports him. no doubt a lot of executives will come out with their take on that news. singles day the biggest on-line shopping day of the year is officially under way. our own david faber will speak
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exclusively to alibaba chairman jack ma tomorrow on "squawk on the street." if you have a question use the #askjackma. in the meantime we're a half hour into the sales. let's bring in gill, managing director at web bush. good to see you. >> thanks for having me. as far as we could tell at the beginning of the hour the momentum was a multiple of what it was last year. what is your expectation and is there any risk this could be a disappointment? >> i would say that's unlikely at this point. less than 20 minutes into singles day exceeded a billion dollars worth of volume. last year they did 5.8 the entire day. i've seen expectations between 8, $8.5 billion for this year. i think they will be able to exceed them. just based on how strongly they came out of the gate, as well as the fact that for this year it's going to extend beyond 24 hours because singles day has gone international and the u.s. singles day is only going to start in about 15 hours.
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>> when you say single days has gone international it does seem like we have seen some retailers here put the technology into place for chinese consumers to buy from u.s. sites or sites in other regions, but what will that affect actually have on the overall marketplace transaction volume? will it still be small? >> ali express is going fast, the consumer website available to consumers outside of china and that's where you're going to see singles day start in about 15 hours and go for 24 hours after that, with some promotions from that site as well. but in china, where you're seeing is a lot of western brands are there, costco, procter & gamble, nike, et cetera, so i would expect that to contribute above and beyond last year. >> gill, do you have hard numbers on where you think this could come out? if $8.5 billion is where people thought it would come out for the day and less than an hour
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into this thing in the middle of the night we're at a billion, what could it be? could it be 12, 13 some what is it tracking towards? what's your best estimate at his point? >> i would say since that 8.5 represents about 50% growth over last year, that's the rate that we're growing in the most recent quarter they reported. since i expect that to be higher, $9 billion would be more a better guess as far as i'm concerned and maybe even a little more than that. >> and gill, is there any fear that discounting will have the same effect on alibaba's margins that it does on retailers here on black friday when we do see record numbers? >> discounting is built into this day. when alibaba started commercializing this day six years ago it was about the 50% promotion and so i would expect that to be built into the forecast for their forecast for the quarter as well as i know it's a built in to my expectations that margins are going to be seasonally lower this quarterp. just like we build in the discounts for the holiday season
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for u.s. retailers. >> gill, we appreciate your time this morning. >> thanks for having me. >> gill luria from wedbush. >> china's single day the biggest shopping day of the year, could see an estimated $10 billion in sales tomorrow. global merchants from outside of china to try to go et in on that action. matt is the head of global launch for paypal joins us at post nine. good morning to you. >> happy singles day. >> same to you. >> can you -- how do you leverage this if you're outside of china but not a chinese vendor? >> chinese consumers 240 to 290 million on-line, right, want ways to pay securely and safely and they pay often with china unipay card. what we're trying to do is help them pay and buy from merchants outside of china. 60 plus merchants we've partnered with to put up a portal where consumers can get deals, pay..wugigo.com.
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>> what does that mean? >> borderless. >> chinese consumers can buy from a baseball card seller in atlanta or a merchant in south korea or, you know, skiing is the biggest new sport in china and we've partnered with a company called base gear.com so you can get 25% off skiing equipment and they're located in beaverton, oregon. >> 60 merchants you said? >> 60 plus. >> is it more of a pilot than anything else or is it the beginning of something truly big? >> i mean, singles day is already huge, right. we heard from gill about alibaba but the market itself last year, it was $8.2 billion in sales. this is huge. it grew -- >> we're not talking hundreds of vendors, for instance, not yet or will we? >> we hope that this will grow hugely. what we're trying to do is tee up with not just the big guys, victoria's secret and other big brands but the small guys, right, who wouldn't have the
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means to -- small merchants who wouldn't have the means to talk to chinese consumers. >> alibaba will be trying to leverage ali pay, ali express to access some of the same venders. what paypal is doing, is that a complement or competitor to that some. >> the market is huge. right. overseas trade is growing exponentially. we expect by 2018 it's going to be over $300 billion market around the world in the top six markets. so it's -- >> ebay is an advertiser of ours. paypal spinning out, exciting stuff going to happen or are you going to do things like square, apple pay? what will we see happen that will accelerate the business? >> we've is said all we're going to say about the spinoff on september 30th. today is about helping ensure or merchants hit their q4 numbers and blow it out of the park. >> what tend to work best, historically? >> it started as a bachelor's holiday, right. >> essentially. >> you have consumer electronics
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and mobile phones but you have fashion, food, and jewelry that have taken off. >> matt, thanks for coming in. >> thanks so much. >> happy singles day. >> another shot across the bow for itunes and pandora. this one coming from garth brooks. returning from retirement with his answer for the struggles of the music industry next. first up, rick santelli, what are you watching? >> you know, i am watching unintended consequences actually become consequences regarding dodd/frank which passed in 2010, and the implementation which is ongoing. specifically, i'm talking about two new scarlet letters for the business community. we'll have to tune in after the break to see what they are. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows.
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like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! (all) awesome! i love logistics. coming up the alibaba phenomenon. live to china as the biggest on-line shopping day of the world gets under way. the stock has been on a tear so what do you do now after a 70% run? another bull ups his target for stocks. the street strategist making that call is here live to defend it. and award winning designer on why his clothes are still made in the usa, he might have fashion tips for the traders. i can't wait for that. >> you're already the best dressed man on television. thank you. see you in a few minutes. over to the cme group. rick santelli with the santelli
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exchange. >> hey, rick. >> good morning, carl. with two new scarlet letters for the financial community, are s and i. imagine those on a sweater. systemically important. a designation you don't want. harken back to 2010 when dodd/frank was passed and believe me it wasn't very well fleshed in, that's an ongoing process that continues today. and one of the offchutes of that legislation was the creation of the financial stability oversight council. they are tasked with giving the designation of systemically important so they can make sure that too big to fail doesn't do what it was purported to have done with regard to being a catalyst in the credit crisis. systemically important, how hard are entities going to try to avoid those scarlet letters? in today's "wall street journal" metlife prepares for possible court fight for too big to fail, throw it on the screen, its
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designation would subject a company to potentially tough but yet to be determined capital and other regulatory standards. well, why does that really a bad thing? let's go to another article in today's "wall street journal" that may give us a clue. it's an op-ed entitled, another big bank handshake. what it says is, ceos have obligations to their shareholders and you can expect many losses. all right. let's put the two together, okay. metlife does not want to basically play kumbaya with regulators should systems break down. why? because the rule of law is quite clear. if i'm a shareholder in metlife i want all their efforts to be to protect as much value for the shares i own in that entity. versus throwing it all out the window and working with regulators as the one quote says, to yet to be determined
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rules, capital rules, and it isn't only in the u.s. here's the scary part as the op-ed brings up, it's like u.n. banking regulation. g-20 coming up in australia, this is going to be one of the front and center issues. in other words, we're going to bring foreign entities potential banking subsidies or systemically important company offshoots, we can end up using taxpayer money or at least changing the rules for shareholders to protect other foreign entities. in the end, this is right back to the credit crisis notion. that if you want to create systems that work and entities that aren't too big to fail, i think you need to let them fail. because all the entities that come after them will get what the deal is. versus thinking regulators can do things on the fly like the credit crisis where all the rules go out the window. not a good idea.
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carl, back to you. >> rick, thank you very much. rick santelli. it has been ten years since firefox was introduced and quickly became one of the top three browsers. we'll talk to the head of the company about new competition and net neutrality in just a minute. the conference call.
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million immediately to groups like doctors without borders, partners in health, save the children, and unicef. what is increasingly a big push for ebola follows what mark zuckerberg has given privately and john and paul allen an others too. >> to help the situation on the ground with technology. moving on the white house, of course, making a big announcement regarding the internet this morning. president obama calling on the fcc to set the strongest possible rules to protect net neutrality when it comes to new internet traffic regulations. hear with some reaction is mitchell baker chair of the mozilla foundation. happy birthday first of all, mitchell, to firefox which has been around for ten years. that's where i want to start off. so mozilla has been an advocate of free and open internet for quite a while now. started firefox to compete with internet explorer. what's your position on net neutrality and do you think it will have the same effect? will it help competition?
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>> two things. it is our anniversary and yes, you described our goals for the mozilla project and firefox as well. bringing openness and user control to the internet we believe that net neutrality is a fund mental principle and a key aspect of this. and that without net neutrality there is no level playing field and new entrants, new businesses will have a very, very difficult time and as consumers, we won't have the range of new ideas and opportunities and products to choose from. so we're very much in support of net neutrality and also of the real classification that's been proposed as the basis for these actions. >> now, what about the argument, though, that reclassification will hinder investment and net neutrality in and of itself isn't going to help people to actually have more options to buy broadband. if i'm a consumer isn't what i want three or four different providers who can compete on price, compete on service
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quality, so if one is throttling me i can switch service to another? >> oh, yes. you're defining an ideal state where there's enough competition for all consumers to actually be able to make a choice. unfortunately, in the last 15 years, we've seen the opposite happen and in areas of the country where there used to be competition there's less and less and many areas no competition at all. so the idea that you propose is not the reality that most of us are living in and so net neutrality as a topic needs to be addressed in other ways as well. >> mitchell, every year consumers are streaming and taking in more data than the last year. i mean we have seen the figures skyrocket for what the average consumer does end up doing on their smartphone or on their broadband in terms of data. i'm just wondering, how will the ultimate bill look? who foots the bill given the activity and how much it's changing. >> oh, well that's a great question. this is a case where the success
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of the system brings other issues to address. the fact that we're using more data that's the success of the system. we're connected and enjoying it. we need to figure out what's the investment model, the payment model for continued infrastructure investments. the particular payment model proposed, however, is one that really destroys the fund mental benefits of the internet. we have a cable system and know what it looks like and we've all experienced trying to watch programs and seeing the notices along the bottom you can't watch this program and call your operator or content provider and protest so they can get their agreements done. we have a system like that. we don't want to turn the internet into the same thing. >> want to get to firefox here. the next version is going to focus a lot more on privacy and try to put more tools, more control over privacy in the hands of consumers. given that recently google has been the main source of
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mozilla's revenue of firefox revenue as the default search provider and given right now you're in negotiations over that contract and there are others like yahoo! and microsoft who would like to take that, where do we go from here? might you switch away from google as you choose your next default search partner? >> well, there's a couple questions in there. let's see, on the default saif search provider i think i'll wait to talk about that until the next time we visit here since those are the kinds of things we'll talk about once we've completed our negotiations. on the other piece about privacy, we've always been an advocate of privacy. there were a few years in there where people said privacy is dead, mozilla, you're a dinosaur, why does firefox care about it? we do. we care about it for the future and for having fund mentals in will as more consumers come around to think we have tools ready for that.
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>> wow. >> thank you so much. i hate to cut you off. near the end of the hour and have to move on. firefox continues to be an important option for consumers and we'll watch what happens with that default search provider. so important. mitchell baker from mozilla. thank you so much. >> thank you. >> when we come back garth brooks making a splash in the streaming music business. a lot more on that. s&p, new record. an unprecedented program arting busithat partners businesses with universities across the state. for better access to talent, cutting edge research, and state of the art facilities. and you pay no taxes for ten years. from biotech in brooklyn, to next gen energy in binghamton, to manufacturing in buffalo... startup-ny has new businesses popping up across the state.
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apple has another competitor in streaming music. country star garth brooks launching his download store called ghost tunes and launches tomorrow. "wall street journal" says it will features songs by thousands of artists and sell concert tickets. brooks has never let his music be sold on any download services and comes on the heels of taylor swift pulling her music from streaming services. another artist that's never ever getting back together with -- >> should have announced it with taylor swift. taylor swift should have been the partner in ghost tunes. >> country and former country leading the way. >> some people expected him to launch a way to sell his music because you've never been able to get it as a fan but it's interesting to see he's partnering with other artists as
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well, not just a platform for his own stuff. i'm interested to see who's going to be on there. >> when artists start launching their own services the music streaming has hit peak streaming. >> just wants to hear his music. >> the thunder needs to roll. >> that's right. that does it on "squawk alley." over to the judge, and the fast money halftime. all right. carl, thanks very much. welcome to the halftime show. meet our starting lineup for today. pete najarian is the co-founder of option munster. stephanie link is coportfolio manager of jim cramer's charitable trust. joe ter nova is the senior managing director at vertis and josh brown ceo of rid holtz wealth management. the the kickoff of the biggest on-line shopping day the world has seen, alibaba's so-called singles day under way in china. it's a made up event that has become a very real en

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